820 F. Supp. 2d 4
D.D.C.2011Background
- Covenant seeks Medicare DSH adjustments for fiscal years 1991 and 1993-1997; the Secretary denied including charity care days in Covenant's Medicaid fraction numerator.
- DSH adjustment calculated from Medicaid fraction and Medicare fraction; Medicaid fraction uses days of patients eligible for medical assistance under a state plan.
- Texas Charity Care Program reimburses hospitals for inpatient care to indigent patients, funded by Texas Medicaid Plan; Covenant’s hospitals provided charity care during the relevant years.
- Board found charity care patients were eligible for medical assistance under a state plan, but CMS reversed, excluding charity days from Covenant’s Medicaid fraction.
- Covenant appealed; following related circuit decisions, the court analyzes whether charity care patients are ‘eligible for medical assistance’ under subchapter XIX.
- Court concludes Secretary properly excluded charity care inpatient days from Covenant’s Medicaid fraction and grants the Secretary’s cross-motion for summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Interpretation of ‘eligible for medical assistance’ | Covenant argues charity care days count. | Secretary limits to federal Medicaid eligibility under subchapter XIX. | Unambiguously limited to federal Medicaid eligibility. |
| Effect of Texas Charity Care Program on Medicaid plan | Texas program integrated into state plan; charity days should count. | Secretary-approved plan does not render charity days Medicaid. | Charity days not received under Medicaid plan; not counted. |
| Role of federal matching funds | Federal matching funds for charity care imply medical assistance. | Payment of funds does not make patients eligible for medical assistance. | Not sufficient to render charity days Medicaid-eligible. |
| Distinctions from Adena and other circuits | Texas differs from Adena’s Ohio context; should be counted. | Adena controls; state plan incorporation does not equal Medicaid eligibility. | Adena controls; charity days excluded. |
Key Cases Cited
- Adena Reg'l Med. Ctr. v. Leavitt, 527 F.3d 176 (D.C. Cir. 2008) (charity care patients not eligible for medical assistance under Medicaid)
- University of Washington Med. Ctr. v. Sebelius, 634 F.3d 1029 (9th Cir. 2011) (DSH counts not convert charity care into Medicaid eligibility)
- Banner Health v. Sebelius, 715 F. Supp. 2d 142 (D.D.C. 2010) (charity care patients not eligible for medical assistance; properly excluded)
- Ashtabula County Med. Ctr. v. Sebelius, 762 F. Supp. 2d 1 (D.D.C. 2011) (charity care patients not eligible for medical assistance; exclusion upheld)